Buying A Restaurant: What Are Things To Consider When Buying A Seasonal Restaurant?

Buying a seasonal small business restaurant can be challenging, but Joe Ranieri a business broker restaurant specialist and others in this BizBen Discussion review multiple ways to offset these factors and still get the most from buying and operating a small to mid-sized seasonal restaurant.

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I live and work in Orange County, California and so there are many beach cities near a boardwalk or promenade that I would consider having seasonal restaurants. Many restaurants in these areas depend on warm weather conditions and are trafficked by a high number of tourists and they see huge sales in the months from April-October, but may see sales plummet by 50%-60% or more in the months in between. A novice buyer who has never owned a seasonal business may be forced to close their doors if they do not plan for the lean months. The rents in affluent areas near the coast can be justified in the spring and summer when the business owner is enjoying 60K-70K gross sales months, but during the "off season" that rent can nearly break them and shutter the doors.

1. Money Management/Rent

An owner should know precisely what their expenses are and not over capitalize in the "hot months." Saving money for the leaner months of business is vital to keeping the doors open. An owner should also monitor their inventory especially at the tail end of the busy season. Businesses in affluent areas, especially near the ocean tend to have a higher dollar amount per square footage, which may not be a problem when times are good, but when things go south, it can be crippling.

2. Staffing

Many college kids or those who are taking a first job are thrilled to only be working for a few short months until they go back to school, and so try to keep an upbeat environment, so many will return year after year. Creating great customer service is very important, because you want to retain as many customers in the off season as possible.

3. Consider Going From 7 Days A Week To 5

As the slower months begin, to save costs, an owner may consider closing Monday and Tuesdays or couple of the slowest days of the week.

4. Offer Loyalty Cards To Locals

Instead of lowering the prices on the menu, which can turn people off when the prices return to normal, consider offering a loyalty rewards program to locals in the off season to keep them coming in the door. A loyalty card can make every fifth sandwich ordered half price or free, etc., and is a great way to retain customers when times are slow.

5. Be Open To Catering Or Invest In A Food Truck

Renting out the kitchen or investing in a food truck can be good opportunities for additional income in the slower months.

I'd be curious to hear what other contributors on this forum have to say, and that includes those who have sold businesses that are seasonal in the fall/winter months.

In addition, seasonality can have a real influence on a business, especially one that is located in a college town. A business, especially a restaurant or bar can see a huge uptick in sales during "move in' week or during graduations, so an owner should staff accordingly. During the university season, business should remain steady but will obviously drop off during the summer months when students and staff are out of session.

BizBen Blog Contributer Buying a Business

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